27th  Congress, 
2d  Session . 


[SENATE.] 


[  133  ] 


IN  SENATE  OF  THE  UNITED  STATES. 


February  21,  1842. 

Ordered  to  be  printed,  to  accompany  Senate  bill  176;  and  that  3,000  additional  copies  be 
furnished  for  the  use  of  the  Senate. 


Mr.  Tallmadge  submitted  the  following 

REPORT :  c 

The  Select  Committee,  to  whom  was  referred  the  “  report  from  the  Secre¬ 
tary  of  the  Treasury ,  communicating  a  plan  of  a  Fiscal  Agent  of  the 
Government respectfully  report : 

That  they  have  given  the  subject  that  consideration  which  its  importance 
demands,  and  now  present  to  the  Senate  some  of  the  views  which  have  brought 
them  to  the  conclusion  to  which  they  have  arrived. 

The  committee  do  not  intend  to  go  into  an  elaborate  argument,  in  favor  of 
such  a  measure.  The  late  period  at  which  this  subject  was  referred  to  them, 
and  the  anxiety  of  the  public  mind  for  speedy  action  on  it,  have  left  them  but 
little  time,  amidst  their  other  pressing  engagements,  to  prepare  an  extended 
report.  They,  therefore,  content  themselves  with  reporting  a  bill  to  establish 
a  fiscal  agent  of  the  Government,  accompanied  by  such  remarks  upon  its 
leading  features  and  principles,  as  seem  to  be  called  for  by  the  occasion. 

Since  the  adoption  of  the  constitution  of  government  under  which  we  live, 
the  country  has  experienced  much  financial  and  commercial  embarrassment. 
But  at  no  period  has  it  been  so  suddenly  precipitated  from  an  apparently  high 
state  of  prosperity,  to  the  lowest  point  of  depression,  as  at  the  present  time. 
The  committee  will  not  attempt  an  enumeration  of  the  causes  which  have 
led  to  this  disastrous  result.  But  they  take  leave  to  say  that,  among  them, 
an  inflated  and  deranged  condition  of  the  currency  is  the  most  prominent. 
There  may  be  a  difference  of  opinion,  as  to  how  this  inflation  and  derange¬ 
ment  have  been  produced.  All,  however,  will  agree  that  the  excess  in  trade 
and  business,  consequent  upon  such  a  state  of  things,  is,  in  some  part,  inci¬ 
dent  to  our  system  of  credit — a  system  which  is  a  characteristic  feature  of  our 
free  institutions.  In  an  attempt  to  correct  these  excesses,  the  committee 
would  wish  to  preserve  and  regulate,  but  not  destroy,  the  system  itself.  The 
efforts  which  have,  heretofore,  been  made  to  correct  them,  have  always  en¬ 
countered  one  grand  obstacle,  in  the  difference  of  opinion  which  has  prevailed 
in  the  community,  as  to  the  kind  of  corrective,  and  the  manner  in  which  it 
should  be  applied.  This  has  led,  in  some  instances,  to  a  reorganization,  and 
a  hostile  array  of  political  parties ;  and  the  great  question  of  regulating  the 
I  currency  of  the  country  has  formed  the  issue  upon  which,  for  some  years 
past,  the  most  violent  political  battles  have  been  fought.  Experience  has 
shown  that,  in  such  contests,  the  business  of  the  counfjy  must  always  be  de 
|  ranged.  And  the  greater  the  sincerity  with  which  the  war  13  waged,  on  the 
one  side  and  the  other,  the  fiercer  will  be  the  conflict,  and  the  more  disastrous 
the  consequences,  as  long  as  the  great  matter  in  difference  remains  unsettled. 

I  T ii»mas  Allen,  print. 


2 


[  133  ] 

There  can  be  no  peace,  no  prosperity,  until  it  be  settled.  1  Other  questions, 
upon  which  political  parties  divide,  are,  comparatively,  harmless.  No  matter 
how  violent  the  contest,  the  business  of  the  country  is  not  affected  by  it. 
Amidst  the  excitement  of  the  public  mind,  the  country  pursues  its  onward 
march  to  prosperity  and  greatness.  But  the  instant  the  question  of  currency 
becomes  the  issue,  it  is  felt,  like  an  electric  shock,  from  one  extremity  of  the 
Union  to  the  other. 

It  behooves,  then,  every  good  and  patriotic  citizen  to  lend  his  aid  in  the 
settlement  of  this  question.  His  inquiry  should  be,  not  what  ought  to  be 
done,  but  what  can  be  done  ?  He  should  be  prepared  to  surrender  his  in¬ 
dividual  opinions,  if  necessary,  in  order  that  some  system  may  be  adopted, 
which  shall  promise  stability  and  permanency  in  relation  to  this  all-absorb¬ 
ing  subject.  The  distresses  of  the  country  are  beyond  much  further  en¬ 
durance.  The  people  throughout  the  extent  of  this  broad  land  cry  aloud 
for  relief.  Thousands  and  thousands  of  our  fellow-citizens  have  been  pros¬ 
trated  by  the  calamities  of  the  times  which  have  overtaken  them.  They 
have  been  suddenly  reduced  from  affluence  to  want.  Their  property, 
which,  under  ordinary  circumstances,  would  have  been  ample  to  meet  all 
engagements,  and  leave  a  competency  to  themselves  and  families,  has  been 
most  cruelly  sacrificed.  Others,  who  have  survived  the  fearful  wreck  of 
the  hopes  of  thousands,  are  still  suffering  by  a  disordered  currency  and  the 
unregulated  exchanges  between  distant  points.  The  one  class  looks  to  thfe 
settlement  of  this  question  as  a  means  of  once  more  engaging  in  a  success¬ 
ful  business  ;  the  other  looks  to  it  as  a  means  of  profitably  carrying  on  the 
business  in  which  they  are  already  engaged.  All  look  to  Congress  for  that 
relief,  which  Congress  alone  has  the  power  to  grant. 

By  relief,  it  is  not  meant  that  Congress  can  furnish  means  to  cancel  the 
indebtedness  into  which  the  community  has  been  plunged  ;  but,  by  aiding 
the  currency  and  exchanges  of  the  country,  it  may  enable  the  people  not 
already  in  hopeless  despondency,  to  liquidate  their  own  debts.  With  such 
aid,  the  productive  industry  of  the  country  will,  in  due  time,  wipe  out  every 
trace  of  distress  that  was  left  by  the  desolating  fury  of  the  storm  which  has 
swept  over  the  land  ;  and  our  great  object  should  now  be,  to  adopt  such 
measures  as  will  protect  us  from  its  ravages  in  future. 

The  ruinous  rates  of  exchange  result  essentially  from  a  depreciated  paper 
circulation.  If  the  currency  can  be  made  sound  and  uniform,  it  will  of 
itself  go  very  far,  and,  with  the  facilities  which  the  General  Government 
can  give,  will  effectually  regulate  the  exchanges. 

The  great  evil  under  which  the  country  now  labors  is  the  want  of  a  uni¬ 
form  currency  and  an  equalization  of  the  exchanges. 

Can  the  General  Government  remedy  this  evil?  This  Government 
must  have  some  mode  to  collect,  keep,  and  disburse,  its  revenue.  This  in¬ 
volves  both  the  question  of  currency  and  exchange :  1.  A  sound  currency 
to  receive  in  payment  of  public  dues.  2.  Exchange  to  transmit  to  distant 
points  the  revenues  of  the  Government,  in  payment  of  the  public  creditor. 

The  committee  propose  then  to  adopt  a  system,  on  the  part  of  this  Gov¬ 
ernment,  for  the  collection,  safekeeping,  and  disbursement,  of  the  public 
revenue,  and  thereby  incidentally  aid  in  furnishing  a  uniform  currency  and 
equalizing  the  exchanges. 

This  is  deemed  the  right  and  duty  of  the  Government ;  and  the  only  ques¬ 
tion  which  remains  is.  how  shall  it  be  done  ? 

Different  modes  have  been  proposed  and  tried.  They  are  :  1.  A  Bank  of 
the  United  States ;  2.  The  State  bank  deposite  system ;  3.  The  Sub-Treasury. 


3 


[133] 

Th<!  first,  a  Bank  of  the  United  States,  is,  at  this  time,  utterly  out  of  the 
question.  The  history  of  past  years  shows  that  a  charter  for  such  an  insti- 
tution  cannot  be  obtained,  however  desirable  it  may  be  deemed  by  many 
and  the  state  of  the  times  demonstrates  that,  if  obtained,  its  stock  could  not 
De  taken  up,  so  as  to  put  it  in  successful  operation. 

The  second,  the  State  bank  deposite  system,  was  discarded  and  put  down 

by  its  most  prominent  friends — those  who  were  foremost  in  establishing  it _ 

before  it  had  received  a  fair  trial,  as  others  of  its  advocates  believe  All 
.  however,  concur  m  saying  that  it  cannot  be  re-established. 

1  he  third,  the  Sub- Treasury,  as  the  committee  believe,  was  signally  con¬ 
demned  by  the  people ;  and  Congress,  in  accordance  with  the  popular  will 
took  the  earliest  opportunity  to  repeal  it.  1  1  ’ 

The  committee  cannot,  therefore,  anticipate  any  state  of  things  in  which 
either  of  these  discarded  systems  can  for  a  long  time,  if  ever,  be  revived. 

canTe  m^ifieT6  b®fore  ‘hose  who  have  the  strongest  predilections  for  either, 
can  be  giatified ;  and  perhaps  that  time  may  never  arrive.  Be  that  as  it  may 
they  are,  each  of  them,  at  present,  far  enough  beyond  our  reach.  Why  then’ 

^asn?WVTl  y  aUe,Tu°  ClU‘Ch  after  a  thin=  which  constantly  eludes  om 
grasp  7  Shall  we  permit  the  country  to  suffer  under  its  present  embarrassments 

because  we  cannot  bring  to  its  aid  our  favorite  mode  of  relief?  And  more 
especially  shall  we  permit  this,  when  that  mode  cannot  be  attained  ?  The 
committee  think  not;  and  this  brings  them  to  the  consideration  of  the  “plan 
of  a  Fiscal  Agenh  recommended  by  the  President,  and  reported  on  byPthe 
Secretary  of  the  Treasury,  and  referred  to  them  by  order  of  the  Senate.^ 

I  he  prominent  objections  to  this  plan,  as  indicated  by  the  opinions  ex- 
piessed  in  the  Senate,  on  the  motion  for  reference,  are _ 

I.  The  patronage  and  power  which  it  gives  to  the  Executive 
1  he  purchase  of  bills  of  exchange. 

3.  The  issue  of  treasury-notes  on  the  credit  of  the  Government 

” ,he  “d  p”“'d 

J .  As  to  Executive  patronage  and  power. 

.,  The  Patr°nage  under  this  system  consists  in  the  appointment  to  office;  and 
the  jKiwer  m  the  removal  from  office.  These  objections  will  lie,  to  a  greater 
or  less  extent  to  any  system  which  can  be  adopted.  But  the  committee 
think,  under  the  modifications  proposed,  they  will  be  substantially  obviated 
The  President,  with  the  advice  and  consent  of  the  Senate,  appoints  three 
who  form  the  Board  of  Exchequer.  These  commissioners  are 
removable  only  with  the  concurrence  of  the  Senate,  and  for  physical  inabil¬ 
ity,  incompetency,  or  neglect  or  violation  of  duty.  They  are  therefore  in¬ 
dependent  of  any  improper  Executive  influence,  if  any  should  be  attempted 

he  BlT'rprr  the'\  The,  nr ber  0f  ^encies 's  *°  be  de«erminedP  by 
se^ke  vvlll  arfmh  qUHer’  °  bC  llmUed  t0  aS  few  M  ‘he  exigencies  of  the 
The  nrl  n •  ’  m  ."l0  f86  t0  exceed  two  in  a»7  State  or  Territory, 
be  nl  b“  y  f  ’  hat’  ^  t  le  excePtlon  of  one  or  two  States,  there  woufd 

L  taZrrr  ,ha?  0n,e,  w  to  each,  and  in  many  instances 
even  that  might  be  dispensed  with;  and  these  agencies  may  be  the  sound 

hankrf  the  StatC3’  where 't  would  not  be  desimble  for  ^ 
■agency  to  receive  deposites,  or  to  accept  or  sell  bills  or  drafts  on  account  of 


4 


[133] 

the  Board  of  Exchequer,  which  banks  acting  as  agents  are  prohibited  to  do  ^ 
In  all  these  cases  there  would  be  no  officers  to  be  appointed ;  and  the  selec¬ 
tion  of  the  specie-paying  banks  as  agents  would  be  made  by  the  Board  of 
Exchequer,  who,  it  has  been  already  shown,  are  independent  of  Executive 
influence.  The  only  officers,  then,  to  be  appointed,  would  be  at  the  agencies 
established  at  some  of  the  most  important  commercial  points.  These  are  to 
be  appointed  by  the  Secretary  of  the  Treasury,  on  the  recommendation  of 
the  Board  of  Exchequer;  and  the  Secretary  of  the  Treasury  appoints,  on  like 
recommendation,  such  inferior  officers  of  the  board  as  in  the  judgment  of  the 
board  the  transaction  of  its  business  may  require.  Any  of  the  officers  of  the 
agencies  may  be  removed  by  the  Secretary  of  the  Treasury,  on  the  recom¬ 
mendation  of  the  board,  for  physical  inability,  or  incompetency,  or  neglect,  or 
violation  of  duty;  but  he  must  state  his  reasons  for  the  removal  of  any  prin¬ 
cipal  officer  of  any  agency,  in  his  general  annual  report  of  the  transactions  of 
the  Exchequer. 

The  whole  extent  of  presidential  patronage,  under  the  plan  of  the  com¬ 
mittee,  is  in  truth  thus  reduced  to  the  simple  nomination  of  three  commis¬ 
sioners  of  the  Exchequer,  subject  to  the  advice  and  consent  of  the  Senate ; 
the  appointment  and  removal  of  all  the  other  officers  of  the  Exchequer,  either 
at  the  seat  of  Government  or  the  agencies,  being  virtually  vested  in  the  board, 
itself  made  effectually  independent  of  the  power  of  the  President  by  the 
tenure  of  office  now  proposed. 

From  this  brief  view  of  the  appointing  and  removing  power,  it  will  be 
seen  that  the  Executive  patronage,  by  reason  of  the  appointment  to  office,  is 
very  little,  and  the  Executive  power,  by  reason  of  the  removal  from  office, 
is  still  less. 

2.  As  to  the  purchase  of  bills  of  exchange. 

To  this  feature  of  the  plan  of  the  Secretary  of  the  Treasury  the  commit¬ 
tee  object.  1.  That  it  would  be  exchanging  the  credit  of  the  Government 
for  the  responsibility  of  individuals,  and  consequently  expose  the  Govern¬ 
ment  to  great  hazard  and  eventual  loss.  2.  That  it  might  be  used  for  polit¬ 
ical  purposes,  and  for  party  favoritism.  3.  That  it  wTould  lead  to  fictitious 
dealings  in  exchange,  without  any  real  business  basis.  The  evils  which 
would  flow  from  all  these  sources  need  not  be  enlarged  upon ;  they  will  at 
once  strike  the  mind  of  every  reflecting  man. 

But,  aside  from  these  objections,  there  are  others  which  would  induce  the 
committee  to  reject  this  power  to  purchase  exchange.  To  exercise  it  dis¬ 
creetly  and  safely,  three  things  are  necessary,  namely,  individual  interest, 
individual  sagacity,  and  individual  vigilance :  interest,  to  secure  proper  atten¬ 
tion  ;  sagacity,  to  distinguish  real  from  fictitious  operations ;  vigilance,  to 
watch  over  the  transactions,  from  inception  to  maturity  and  payment.  These 
qualities,  from  the  nature  of  things,  cannot  be  combined  to  the  desired  ex¬ 
tent,  in  a  public  officer,  however  faithful  and  honest  he  may  be.  He  may 
intend  conscientiously  to  discharge  his  duty  ;  but,  in  business  operations  of 
this  description,  he  cannot  discharge  it,  as  mi  individual  would  transact  his 
own  business.  It  would,  therefore,  be  dangerous  to  give  this  power,  without 
incorporating  the  interests  of  individuals  into  the  system,  which  is  not  pro¬ 
posed  to  be  done. 

The  committee,  however,  prepose,  in  another  mode,  to  confer,  substantially ? 
the  same  benefits  without  any  of  the  risks.  This  can  be  accomplished  by 
authorizing  the  Exchequer  and  its  agencies  to  sell  and  collect  bills  of  ex¬ 
change,  In  this  there  is  no  possible  hazard,  1>  .As, to  selling:  This  may  be 


5 


[  133  ] 

done  either  by  one  agency  drawing  a  bill  on  another,  on  payment  of  the 
amount  and  premium  in  specie,  or  by  accepting  the  bill  payable  at  the 
agency  where  drawn,  as  will  best  comport  with  the  state  of  accounts  between 
them,  and  best  promote  the  interests  of  all  parties. 

This  will  answer  all  the  purposes  of  buying  or  discounting  bills  of  ex¬ 
change.  Buying  or  discounting  bills  on  time  is,  in  other  words,  a  mode  of 
anticipating  funds.  The  legitimate  object  of  a  bill  is  not  to  anticipate,  but 
to  remit  funds.  These  funds  may  be  remitted  without  the  hazard,  on  the 
part  of  the  Government,  of  the  purchase  of  the  bill;  and,  at  the  same  time, 
accommodate  equally  well  the  individual  to  whom  they  belong.  For  ex¬ 
ample,  if  a  merchant  in  New  York  has  funds  in  Cincinnati,  for  which  he 
is  entitled  to  draw  at  sixty  days,  he  may  direct  his  correspondent  there,  at 
the  end  of  that  time,  to  deposite  the  amount  in  the  agency  at  that  place  and 
send  him  a  bill  at  sight  on  the  agency  at  New  York,  where  he  can  receive 
the  amount  on  presentation  of  the  bill.  In  the  meantime,  if  he  wishes  to 
anticipate  his  funds,  he  can  get  his  note  done  at  one  of  the  local  banks, 
whose  business  it  is  to  discount,  and  rely  upon  the  bill  of  his  correspondent 
at  Cincinnati  to  meet  it  at  maturity. 

2.  As  to  collecting :  The  committee  propose  to  authorize  the  Board  of  Ex¬ 
chequer  and  its  agencies,  under  regulations  to  be  prescribed  by  the  board,  to 
■  receive  and  collect  such  drafts  and  bills  of  exchange  as  may  be  deposited 
with  them  for  that  purpose,  drawn  on  any  place  where  an  office  of  the  Ex¬ 
chequer  may  be  established  ;  but  that  no  advance  or  payment  shall  be  made 
on  such  draft  or  bill  until  it  shall  have  been  actually  collected  and  advice 
received  of  such  collection,  when  the  proceeds  shall  be  paid  over  to  the 
person  entitled  to  receive  them,  after  deducting  reasonable  charges  and 
commission. 

The  facilities  afforded  by  this  system  for  selling  and  collecting  exchange 
will  promote  the  interests  of  the  whole  country  equally  well  with  the  power 
to  purchase,  and,  at  the  same  time,  save  the  Government  from  the  possi¬ 
bility  of  loss  or  hazard. 

3.  As  to  the  issue  of  treasury-notes  on  the  credit  of  the  Government. 

From  the  view  taken  of  this  subject  by  the  committee  it  is  unnecessary 

to  discuss  the  question  as  to  how  far  the  issue  of  treasury-notes  on  the 
credit  of  the  Government,  to  circulate  as  currency,  is  obnoxious  to  the  con¬ 
stitutional  objection  to  bills  of  credit. 

The  committee  are  of  opinion  that  no  paper  should  issue  on  the  credit  of 
the  Government  to  circulate  as  currency.  There  can  be  but  two  motives 
for  the  issue  of  such  paper.  1.  To  anticipate  the  revenue  to  meet  the  en¬ 
gagements  of  the  Government.  2.  To  aid  the  currency  of  the  country  by 
this  addition  to  the  circulating  medium. 

As  to  the  first,  the  committee  hold  it  wrong  in  principle  for  the  Govern¬ 
ment  to  anticipate  its  revenues  by  this  means.  Its  tendency  would  be  to 
excessive  issues,  and  to  a  reluctance  on  the  part  of  the  Government  to  levy 
adequate  duties  for  revenue.  Either  result  would  be  in  the  highest  degree 
derogatory  to  our  national  character.  The  revenues  of  the  country  should 
always  be  adequate  to  the  economical  wants  of  the  Government,  and 
the  Government  should  never  have  occasion  to  anticipate  its  revenues. 
But  if  an  emergency  should  happen,  when  its  means  are  not  sufficient  to 
meet  its  engagements,  it  may  get  the  authority  of  Congress,  as  has  often 
‘been  done  before,  to  issue  treasury-notes,  not  as  a  currency,  but  as  a  means 
^of  borrowing — treasury-notes,  bearing  an  interest,  to  be  taken,  as  an  invest¬ 
ment  by  capitalists,  and  not  as  a  circulating  medium  for  the  people. 


6 


[133] 

As  to  the  second,  the  committee  do  not  perceive  how  a  currency  issued 
on  the  credit  of  the  Government,  can  make  any  permanent  addition  to 
the  circulating  medium  beyond  the  business  wants  of  the  country.  Such 
a  currency,  if  it  could  be  put  in  circulation  beyond  those  wants,  would, 
displace  and  send  into  retirement  an  equal  amount  of  the  local  currency, 
so  that  the  aggregate  amount  remaining  would  be  the  same  as  before. 
Any  benefit  to  be  derived  by  this  better  currency  of  the  Government, 
if  perchance  a  currency  issued  on  its  credit  should  eventually  be  better, 
would  not  compensate  for  the  violation  of  what  the  committee  deem  a 
great  and  fundamental  principle,  namely,  that  no  paper  should  issue  on  the 
credit  of  the  Government  to  circulate  as  currency. 

The  Secretary  of  the  Treasury  proposes  to  issue  $15,000,000  of  treas¬ 
ury-notes,  founded  on  a  specie  basis  of  $5,000,000.  In  other  words,  to  is¬ 
sue  a  paper  currency,  convertible  into  specie,  in  the  ratio  of  three  dollars  of 
paper  to  one  of  specie.  In  ordinary  banking  operatiqns,  this  is  deemed  a 
perfectly  safe  ratio.  In  truth,  the  circulation  of  most  banks  is  not  regula¬ 
ted  by  the  specie  in  their  vaults.  Their  issues  are  sometimes  in  proportion 
to  capital,  and  sometimes  graduated  by  discounts.  The  ratio,  however,  of 
three  to  one  has  always  been  deemed  safe  in  banking  operations.  But 
would  it  be  a  safe  principle  for  the  Government  to  adopt,  in  regard  to  any 
paper  it  may  issue,  to  circulate  as  currency  ?  The  committee  think  not. 
The  officers  of  Government  cannot  provide  for  contingencies  and  emer¬ 
gencies,  as  individuals,  or  as  banks  controlled  by  individuals,  can  do. 
However  faithful  and  honest  they  may  be,  and  however  conscientiously 
they  may  intend  to  discharge  their  duties,  they  have  not  the  interest  nor 
the  means  to  provide  for  such  occasions.  Individuals  interested  in,  and 
concerned  in  the  management  of  banks,  are  always  looking  out  and  provi¬ 
ding,  in  advance,  for  any  sudden  demand  upon  them  for  specie  ;  and,  with 
all  their  interest,  sagacity,  and  vigilance,  they  are  nut  always  able  to  pro¬ 
vide  against  a  suspension  of  specie  payments.  Will  the  officers  of  Govern¬ 
ment  be  any  better  able  to  provide  against  it  ?  There  might  be  a  sudden 
and  unexpected  demand  which  would  drain  an  agency,  at  once,  of  its  spe¬ 
cie.  There  might  be  a  systematic  operation  and  combination,  from  politi¬ 
cal  or  other  motives,  to  accumulate  the  notes  of  an  agency,  and  to  present 
them  suddenly  and  unexpectedly  for  redemption,  and  for  the  express  pur¬ 
pose  of  compelling  it  to  suspend  specie  payments.  The  effect  would  be, 
not  only  to  destroy  the  credit  of  the  Government,  but  to  disgrace  it  in  the 
eyes  of  the  world.  The  Government  should  not  be  so  exposed.  Its  credit 
should  always  be  beyond  any  possible  contingency. 

The  committee,  therefore,  propose  that  no  paper  shall  be  issued  on  the 
credit  of  the  Government,  to  circulate  as  currency  ;  but  that  a  paper  may 
be  issued  for  that  purpose,  based  upon  specie  on  hand,  dollar  for  dollar ,  and 
that  the  amount  of  such  paper  in  circulation  shall  not,  in  any  case,  nor  un¬ 
der  any  circumstances,  exceed  the  amount  of  specie  holden  for  its  redemp¬ 
tion. 

The  paper  thus  issued  is  called  specie-notes ,  as  being  a  currency  based 
on  specie ,  and  as  contradistinguished  from  treasury-notes  which  are  issued 
on  the  credit  of  the  Government,  not  for  currency,  but  as  a  means  of  bor¬ 
rowing. 

These  specie-notes  can,  in  no  sense  whatever,  be  obnoxious  to  an  objec¬ 
tion,  as  bills  of  credit.  They  are  not  issued  on  the  credit  of  the  Govern¬ 
ment,  but  are  issued  on  specie  in  deposite,  of  an  equal  amount,  for  their  re- 


7 


[  133  ] 

demption.  They  pass  by  delivery  from  hand  to  hand,  as  a  currency;  and 
the  possessor  of  such  a  note  holds  it  as  evidence  of  ownership  of  the  amount 
of  specie  which  it  represents,  and  to  the  possession  of  which  he  is  entitled  at 
any  moment,  on  presentation  of  the  note  at  the  agency  where  issued.  Until 
that  time,  the  specie  remains  in  the  depository  of  the  Government,  is  guarded 
by  its  authority,  and  the  holder  of  the  note  has  the  responsibility  of  the  Gov¬ 
ernment  for  its  safe  custody. 

These  specie-notes,  issued  upon  the  public  revenue  to  the  public  creditor 
in  the  disbursements  of  the  Government,  and  upon  the  deposites  of  individu¬ 
als,  would  form  a  currency  of  the  most  perfect  character — a  currency  com¬ 
bining  all  the  conveniences  of  paper,  with  the  value  of  coin.  They  would 
everywhere  be  preferred  to  coin.  They  would  be  preferred  by  the  public 
creditor,  as  well  as  by  the  whole  community,  because  every  one  would  know 
that  the  specie  was  resting  in  the  Government  depository  for  their  redemp¬ 
tion,  and  with  it  the  guarantee  of  the  Government  for  its  safekeeping. 

The  issue  of  such  a  paper,  equal  only  in  amount  to  the  specie  held  for  its 
redemption,  will  neither  increase  nor  diminish  the  currency ;  consequently 
there  will  be  no  power  on  the  part  of  the  Government  to  expand  or  contract 
the  currency— a  power  which  the  committee  think  should  never  be  possessed 
or  exercised  by  the  Government.  So  far,  therefore,  as  its  action  is  concerned, 
it  cannot  cause  a  scarcity  or  abundance  of  money,  and  of  course  cannot  inju¬ 
riously  affect  the  business  of  the  country.  There  will  be  no  inflation  of  the 
currency,  or  any  rise  or  fall  in  the  prices  of  commodities  through  its  instrumen¬ 
tality.  The  receipts  and  disbursements  of  the  Government  are  so  nearly  equal, 
that  any  expansion  or  contraction  will  be  regulated  by  the  business  from 
which  revenue  is  derived,  and  will  only  be  a  healthy  action  of  the  system. 

Neither  would  these  specie-notes  of  a  low  denomination  be  liable  to  the 
objection  which  is  sometimes  made  to  the  small-note  circulation  of  the  banks, 
namely,  that  of  driving  specie  out  of  the  country.  On  the  contrary,  the  spe¬ 
cie  would  remain  under  the  safe  custody  of  the  Government  for  their  redemp¬ 
tion  ;  and  while  these  notes  would  form  a  more  active  and  convenient  circu¬ 
lating  medium  for  the  people  than  the  specie  they  represent,  the  specie  would 
remain  at  rest,  and  not  be  exposed  to  the  casualties  of  circulation,  by  which 
it  is  often  irrecoverably  lost  to  the  world.  In  this  view  of  the  matter,  the  com¬ 
mittee  see  no  objection  to  an  issue  of  specie-notes  of  a  denomination  corre¬ 
sponding  to  the  small-note  circulation  of  the  banks.  Being  free  from  all  pos¬ 
sible  risk,  and  in  no  way  obnoxious  to  the  objections  which  are  made  to 
those  notes,  they  would  be  peculiarly  acceptable  and  beneficial  to  that  most 
useful  and  respectable  class,  to  wit,  the  small  dealers  and  day  laborers  through¬ 
out  the  country.  They  would  feel,  that  while  Government  is  providing  a 
currency  of  undoubted  credit  and  safety  for  the  larger  business  interests  of 
the  community,  it  is  not  unmindful  of  those  of  smaller  means,  and  of  more 
humble  occupation. 

Undei  the  proposed  system,  there  is  to  be  no  power  of  discount  in  any 
shape  whatever;  that  must  be  left  to  the  local  institutions.  To  them  it  more 
appropriately  belongs.  Those  institutions  would  feel  the  salutary  influence 
of  the  operations  of  the  Exchequer  in  the  frequent  settlement  of  balances, 
and  the  consequent  restraint  upon  over-issues  and  excessive  circulation.  Its 
tendency  would  be  to  confine  their  discounts  to  business  instead  of  accom¬ 
modation  paper — the  only  safe  rule,  in  fact,  for  banking  operations.  Under 
such  a  rule,  there  would  be  no  danger  to  the  community  from  their  contrac¬ 
tions  and  expansions;  they  would  be  regulated  and  controlled  by  the  busi- 


8 


[133] 

ness  of  the  country,  and  expand  and  contract  with  it;  their  circulation  would 
be  increased  at  that  season  of  the  year  when  the  products  of  industry  are  go¬ 
ing  forward  to  market,  and  would  furnish  the  means  of  getting  it  there;  and 
it  would  contract  again  when  those  operations  have  been  performed,  and  the 
business  consummated.  This  would  be  a  sound  and  healthy  action  of  the 
banking  system,  and  would  be  much  promoted  by  the  practical  operations  of 
the  Exchequer. 

Would  this  system  furnish  a  uniform  currency  ?  If  by  a  uniform  curren¬ 
cy  it  is  meant,  that  the  General  Government  shall  undertake  to  furnish  an 
amount  of  currency  adequate  to  the  wants  of  the  whole  country  the 
committee  answer,  no.  It  neither  has  the  *power  nor  the  ability  to  do 
so.  No  measure  which  Congress  can  adopt,  whether  it  be  in  the  shape 
of  a  national  bank  or  otherwise,  can  supply  a  hundred  millions  or  more 
of  currency  to  meet  the  existing  or  increasing  wants  of  the  community — 
wants,  increasing  by  the  rapid  increase  of  population,  and  the  consequent 
augmentation  of  the  products  of  domestic  industry.  From  the  adoption  of  the 
constitution  to  the  present  time,  the  States  have  furnished  by  far  the  greater 
portion  of  this  currency,  and  they  will  continue  to  furnish  it.  Their  right 
to  do  so  cannot  be  superseded  by  any  action  on  the  part  of  this  Govern¬ 
ment.  All  that  Congress  can  do,  is  to  infuse  into  the  great  mass  of  the 
circulating  medium  of  the  country,  a  currency  issued  under  its  authority, 
and  of  such  undoubted  credit,  that,  with  the  local  currency  of  the  States, 
when  restored  to  a  sound  condition,  shall  together  form  a  uniform  cur¬ 
rency  throughout  the  country. 

The  currency  of  the  local  specie-paying  banks  in  sound  condition  is  as 
good,  for  all  practical  purposes,  within  the  sphere  of  its  circulation,  as  any 
currency  which  this  Government  can  issue.  But  such  a  circulation  can¬ 
not  extend  beyond  that  sphere,  and  maintain  itself  alongside  of  such  a  cur¬ 
rency  as  is  proposed  to  be  issued  on  the  part  of  this  Government.  The 
experience  and  observation  of  every  one  demonstrate  that  a  local  currency, 
however  sound,  cannot  have  that  universal  credit  which  would  attach  to  a 
currency  of  the  General  Government,  founded  on  a  specie  basis,  and  car¬ 
rying  with  it  the  responsibility  of  the  Government  for  the  safe  custody  of 
the  specie  which  it  represents.  Neither  would  a  local  currency,  though 
founded  on  a  similar  basis,  possess  that  universal  credit ;  and,  perhaps,  the 
most  concise  reason  which  can  be  given  is,  that  one  is  local,  and  the  other 
general.  To  the  General  Government  the  people  of  the  whole  country 
look  ;  to  the  State  Government,  the  people  of  the  State  look.  The  credit  of 
the  one,  so  far  as  currency  is  concerned,  is  universal ;  the  credit  of  the 
other  is  local. 

The  currency  of  the  New  York  banks,  and  the  currency  of  the  Ken¬ 
tucky  banks,  when  paying  specie,  are  as  good  for  all  practical  purposes 
within  their  respective  spheres  of  circulation,  as  a  Government  currency. 
The  same  may  be  said  of  any  other  distant  points.  All  that  isswanting, 
then,  to  make  a  uniform  currency  over  the  whole  Union  is  one  of  such  un¬ 
doubted  credit  and  so  universally  known,  that  it  will  be  as  good  in  New 
York  as  in  Kentucky,  and  as  good  in  Maine  as  in  Arkansas — a  currency 
which,  for  travel  and  remittance,  will  enable  one  to  go  or  send  from  one 
of  these  spheres  of  local  circulation  to  another.  This  the  proposed  Gov¬ 
ernment  currency  would  do ;  and  it  would  require  but  a  moderate  amount, 
compared  with  the  whole  circulation  of  the  country.  This  amount  would 
be  furnished.  1.  By  the  disbursement  of  the  public  revenues  in  specie- 


9 


[  133  ] 

notes  in  payment  to  the  public  creditor,  and  which  would  be  preferred  by 
him  to  coin.  2.  By  the  issue  of  such  notes  on  the  deposites  of  specie  by 
individuals,  for  the  purpose  of  entering  into  general  circulation.  The 
greater  amount  of  these  specie-notes  would  be  issued  from  the  agencies  at 
the  great  commercial  emporiums  of  the  country,  and  would  have  a  uni¬ 
versal  credit  throughout  the  Union.  The  receipt  and  disbursement  of 
$25,000,000  of  public  revenue  annually  would  keep  up  an  active  circula¬ 
tion  of  an  amount  adequate  to  the  disbursement  of  so  large  a  sum ;  and 
which  amount,  with  that  which  would  be  issued  on  private  deposites,  and 
in  connexion  with  the  selling  and  collecting  of  exchange,  would  be  fully 
adequate,  with  a  sound  local  circulation,  to  furnish  a  uniform  currency 
throughout  the  country. 

There  would  be  no  difficulty  in  keeping  a  sufficient  amount  in  circula¬ 
tion  to  answer  all  the  purposes  for  which  they  are  intended.  Although 
two  thirds,  or  three  fifths  of  the  revenue  from  customs  is  collected  in  the 
city  of  New  York,  still  there  is  but  a  comparatively  small  portion  of  it  dis¬ 
bursed  there.  The  large  disbursements  of  the  Government  are  made  in 
the  West,  for  Indian  treaties,  Indian  annuities,  for  the  army,  for  military 
roads,  fortifications,  and  posts,  for  the  improvement  of  lake  harbors,  and 
the  channels  of  rivers,  for  the  great  variety  of  expenses  for  public  build¬ 
ings,  internal  improvements,  and  the  civil  administration  of  the  Territo¬ 
ries,  with  thousands  of  other  disbursements  which  cannot  be  enumerated. 
All  these  would  undoubtedly  be  paid  in  the  specie-notes  of  the  Exchequer, 
and,  although  they  are  receivable  for  public  dues,  and  the  natural  tenden¬ 
cy  would  be,  to  follow  the  course  of  trade  to  the  Atlantic  cities,  still  there 
would  be  counteracting  causes  to  retain  them  there.  A  large  amount 
would  be  retained  for  land  office  money  ;  and  the  smaller  denominations 
having  entered  into  circulation  among  the  people,  would  be  retained  in 
circulation,  by  reason  of  its  convenience  and  undoubted  credit.  And  even 
the  amount  which  should  find  its  way  to  the  Atlantic  cities  in  payment  of 
public  dues,  would  at  once  be  thrown  back  upon  the  West,  in  payment  of 
the  public  creditors.  The  West  would  also  receive  a  very  large  amount  of 
this  circulation  from  the  emigrants  of  New  England,  New  York,  Virginia, 
and  other  Atlantic  States,  as  well  as  from  the  vast  influx  of  foreigners  from 
the  continent  of  Europe.  All  would  deposite  their  specie  in  the  Atlantic 
agencies,  and  take,  in  lieu  of  it,  the  specie-notes  of  the  Exchequer.  On 
their  arrival  in  the  West,  they  would  pay  them  into  the  land  offices,  in¬ 
stead  of  being  subjected  to  the  expense  and  risk  of  carrying  specie,  or  any 
local  currency  on  which  they  might  be  compelled  to  pay  a  large  discount 
to  procure  specie.  They  would  also  use  these  specie-notes  in  all  their  dis¬ 
bursements  for  the  purchase  of  stock,  and  for  the  improvement  of  their 
farms.  Again  :  the  eastern  merchants  would  send  these  specie-notes  to  pay 
their  purchases  of  the  products  of  the  West.  It  seems  to  the  committee, 
that  the  West  would  have  an  abundant  share  of  this  Government  curren¬ 
cy,  and,  in  connexion  with  the  benefits  which  it  would  derive  from  ex¬ 
changes,  that  its  interests  would  be  peculiarly  promoted  by  the  establish¬ 
ment  of  this  system. 

This  paper  circulation,  based  upon  specie,  dollar  for  dollar,  will  not  add 
to  the  circulating  medium  of  the  country.  The  committee  have  heretofore 
shown  that  it  ought  not  to  add  to  it;  but  it  has  many  advantages  over  specie. 
Among  those  advantages  are  the  following : 

1.  It  will  be  the  means  of  drawing  forth  from  its  hiding  places  specie  that 


10 


[  133  ] 

has  been  hoarded,  to  the  estimated  amount  of  several  millions,  and  which,  in 
its  present  condition,  is  of  no  use  to  its  possessor  nor  to  the  country.  Tha 
lack  of  confidence  in  individuals  and  banks  as  safe  depositories,  which  caused 
this  retirement  of  specie,  will  yield  at  once  to  the  unbounded  confidence  in¬ 
spired  by  the  Exchequer,  where  specie-notes  are  issued  on  a  deposite  of  spe¬ 
cie,  and  the  safe  custody  of  the  deposite  is  guarantied  by  the  Government  for 
the  redemption  of  the  notes. 

2.  In  the  ratio  of  the  increased  velocity  and  economy  which  paper  affords 
over  specie,  and  to  which  may  be  added  the  high  credit  of  this  paper,  it  will 
impart  a  great  activity,  and,  consequently,  effectiveness  to  the  circulating  me¬ 
dium. 

3.  The  local  banks  may  be  induced  to  a  great  extent  to  substitute  this 
paper  for  their  own. 

4.  It  will  prevent  the  depreciation  of  specie  by  abrasion,  while  in  circula¬ 
tion. 

5.  It  will  prevent  its  total  loss  to  the  country  and  to  the  world  by  shipwreck 
and  other  casualties. 

6.  It  will  afford  the  most  convenient,  safe,  and  valuable  currency  for  travel. 

7.  It  will  be  the  best  and  safest  remittance  by  mail,  from  one  end  of  the 
Union  to  the  other,  for  the  payment  of  newspapers  and  periodicals,  and  other 
tilings  requiring  small  sums,  without  the  possibility  or  loss  by  depreciation  to 
those  who  receive  it. 

8.  It  will  tend  to  regulate  the  banks,  and  by  a  frequent  settling  of  bal¬ 
ances,  to  bring  them  up  to  a  sound  circulation. 

9.  It  will  do  much  toward  regulating  exchanges,  by  means  of  its  favora¬ 
ble  action  on  the  local  currency. 

In  the  view  which  the  committee  have  thus  far  taken  of  the  plan  of  a  fiscal 
agent,  submitted  by  the  Secretary  of  the  Treasury,  they  have  suggested  cer¬ 
tain  important  modifications;  and  in  order  to  give  the  Senate  a  more  concise 
and  connected  view  of  the  system,  as  they  propose  to  modify  it,  they  submit 
the  following 

PLAN. 

I.  A  board  to  be  established  in  the  Treasury  Department,  at  the  seat  of 
Government,  to  be  called  the  Exchequer  of  the  United  States.  The  board 
to  be  composed  of  three  commissioners,  to  be  appointed  by  the  President, 
with  the  advice  and  consent  of  the  Senate  ;  and  to  be  removed  from  office 
only  with  the  like  concurrence  of  the  Senate,  and  for  physical  inability,  in¬ 
competency,  neglect,  or  violation  of  duty.  The  President  to  communicate 
to  the  Senate  the  particular  reasons  of  the  proposed  removal.  For  like- 
causes,  the  President  may  suspend  a  commissioner,  and  appoint  a  tempo¬ 
rary  substitute,  and,  within  the  first  week  of  the  ensuing  session  of  the 
Senate,  lay  before  that  body  the  reasons  of  such  suspension ;  and,  if  the 
Senate  concur,  the  commissioner  to  be  removed  ;  if  not.  to  be  restored. 

II.  The  Board  of  Exchequer  to  establish  agencies  as  it  may  deem  neces¬ 
sary  and  expedient  for  the  public  service  ;  limiting  the  number  to  as  few  as 
the  exigencies  of  the  service  will  admit,  and  in  no  case  to  exceed  two  in 
any  State  or  Territory. 

III.  The  Secretary  of  the  Treasury  to  appoint  the  inferior  officers  of  the 
board,  and  also  the  officers  of  the  agencies,  on  the  recommendation  of  the 
board  ;  and  to  remove  them  for  physical  inability,  incompetency,  neglect, 
or  violation  of  duty,  on  like  recommendation. 


11 


[  133  ] 

IV.  The  Exchequer  and  its  officers  to  be  the  general  agents  of  the  Gov¬ 
ernment  for  receiving,  safekeeping,  and  disbursing,  the  public  moneys^ 
The  public  money  ftom  all  sources  received  to  be  paid  into  the  Exchequer 
and  its  agencies. 

Y.  The  Exchequer  and  agencies  to  receive  on  deposite  gold  or  silver  coin, 
or  bullion,  and  to  issue  specie-notes  for  the  same,  to  be  redeemed  at  the 
agency  where  issued — said  notes  to  be  prepared  by  the  Secretary  of  the 
Treasury,  signed  by  the  Treasurer,  and  countersigned  by  the  president  of 
the  Board  of  Exchequer,  and  made  payable  to  the  order  of  the  principal 
agent,  and  endorsed  by  him  when  issued  at  such  agency. 

YI.  The  Exchequer  and  agencies,  on  the  deposite  of  gold  or  silver  coin,  or 
bullion,  to  draw  and  accept  bills  of  exchange,  and  to  receive  a  premium  not 
exceeding  two  per  centum.  Also,  to  collect  drafts  or  bills,  but  to  make  no 
advance  or  payment  till  advised  of  the  collection,  and  to  charge  a  reasonable 
commission  for  collection  and  exchange. 

VII.  All  specie-notes  issued,  either  in  payment  of  the  public  creditor,  or  on 
the  deposites  of  individuals,  never  to  exceed  the  actual  amount  of  specie  on 
hand  for  their  redemplion,  dollar  for  dollar. 

VIII.  Dues  to  the  United  States  to  be  paid  in  gold  or  silver  coin,  in  specie- 
notes,  or  in  the  notes  of  banks  immediately  convertible  into  specie  at  the 
place  where  received.  The  Exchequer  and  agencies  to  settle  weekly,  or  of- 
tener,  balances  with  the  banks. 

IX.  The  Exchequer  and  agencies  to  keep  separate  and  distinct  sets  of 
books;  to  enter  and  record,  in  one  set,  all  transactions  respecting  the  collec¬ 
tion,  keeping,  and  disbursing  of  the  public  revenue,  and  transmitting  the  pub¬ 
lic  moneys  from  place  to  place,  for  the  service  of  the  Government ;  and,  in 
another,  all  transactions  and  accounts  arising  from  the  operations  in  exchange, 
and  other  transactions  not  on  Government  account. 

X.  The  Exchequer  may  appoint,  as  agent,  any  specie-paying  bank;  but 
such  bank  is  not  authorized  to  receive  private  deposites,  or  to  accept  or  self 
bills  or  drafts  on  account  of  the  Exchequer. 

XL  The  Exchequer  and  agencies  to  act  as  commissioners  of  loans,  and 
pension  agents,  and  generally  to  render  all  facilities  in  transferring  and  dis¬ 
bursing  the  public  funds.  Full  and  exact  accounts  of  the  board  and  agencies 
to  be  furnished  to  the  Secretary  of  the  Treasury,  and  he  to  report  to  Congress. 
Necessary  rooms  and  vaults  to  be  provided,  sureties  to  be  taken,  and  penalties 
prescribed,  and  strict  examinations  made. 

The  details  of  the  above  plan  are  fully  carried  out  in  the  bill  which  ac¬ 
companies  this  report. 

The  committee,  then,  propose  a  system  free  from  all  risk,  and  of  perfect 
safety ;  a  system  in  which  there  is  not  the  possibility  of  hazard  to  the  com¬ 
munity,  and  none  to  the  Government,  except  in  the  keeping  of  the  public 
money.  This  is  a  risk  which  must  always  be  incurred  on  the  part  of  the, 
Government.  It  is  inseparable  from  any  system  which  can  be  proposed  or 
adopted.  If  it  be  supposed,  as  it  has  been  by  many,  that  the  public  money 
would  be  safer  in  a  bank  of  the  United  States,  or  under  the  State  bank  de¬ 
posite  system,  the  committee  have  already  shown  that  both  those  modes  of 
keeping  it  are  utterly  out  of  the  question.  They,  therefore,  adopt,  at  the 
principal  agencies,  the  only  one  left,  namely,  the  custody  of  individuals  ap¬ 
pointed  for  the  express  purpose  by  the  Government,  with  as  ample  sureties, 
and  under  such  penalties,  as  the  law  is  capable  of  providing. 

This  system  is  designed  for  the  collection,  safekeeping,  and  disbursement,, 


12 


l  133  ] 

of  the  public  revenues;  and,  through  its  operations,  to  furnish  a  uniform  cur¬ 
rency,  and  to  equalize  exchanges. 

The  committee  have  already  shown  in  what  way  it  would  furnish  a  uniform 
currency,  and  they  have  no  doubt  that  the  specie-notes  which  would  be  put  in 
circulation  by  it,  would  in  amount  exceed  the  circulation  of  the  late  Bank  of 
the  United  States.  The  average  circulation  of  that  institution  during  the 
existence  of  its  charter,  was  about  $10,000,000,  and  its  average  amount  of 
specie  on  hand,  short  of  $6,000,000.  Tn  some  years  its  specie  equalled ,  in 
others  exceeded,  its  circulation,  and  but  for  its  expansions,  commencing  in 
1829,  and  continuing  to  the  expiration  of  its  charter,  its  average  circulation 
would  not  have  much  exceeded  its  average  specie  on  hand.  It  cannot  be 
doubted,  then,  that  the  circulation  of  the  Exchequer  will  equal,  if  not  ex¬ 
ceed,  that  of  the  Bank  of  the  United  States.  And  if  the  Bank  of  the  United 
States  furnished  a  uniform  currency,  then  the  Exchequer  will  be  capable  of 
doing  the  same  ;  and  that  too,  without  any  risk  to  the  community,  or  hazard 
to  the  credit  of  the  Government. 

This,  when  accomplished,  will  do  much  toward  equalizing  exchanges. 
The  ruinous  rates  of  exchange  between  remote  sections  of  the  country  re¬ 
sult,  essentially,  from  the  depreciation  of  the  local  currency.  If  the  paper  cir¬ 
culation  of  New  York  and  New  Orleans  were  both  of  the  value  of  specie,  and 
the  balance  of  trade  between  the  two  places,  by  reason  of  the  interchange  of 
commodities,  were  merely  nominal,  exchange  between  those  distant  points 
would  be  at  par.  But  if  the  balance  of  trade  were  in  favor  of  New  York,  then 
a  bill  drawn  at  New  Orleans  on  New  York  would  command  a  premium  equal 
to  freight,  insurance,  interest,  and  other  necessary  charges  for  remitting  specie. 
But  while  the  paper  circulation  of  New  York,  by  reason  of  its  convertibility, 
is  of  the  value  of  specie,  and  that  of  New  Orleans  is  depreciated  because  of  the 
suspension  of  its  banks,  a  bill  drawn  at  the  latter  place  on  the  former,  and 
paid  for  in  depreciated  paper,  would  command  a  premium  equal  to  the  cost 
and  charges  of  remitting  specie,  added  to  *he  amount  of  the  depreciation  of  the 
local  paper  below  the  value  of  specie.  The  reverse  would  be  the  case,  under 
these  circm instances,  with  a  bill  drawn  in  New  York  on  New  Orleans.  No 
regular  business,  without  great  sacrifice,  can  sustain  itself  under  such  a  ruin¬ 
ous  rate  of  exchange.  The  uniform  currency  which  will  be  furnished  by 
the  operations  of  the  Exchequer  will  do  much  towards  curing  this  great  evil. 

But  there  is  another  feature  in  this  system  by  which  the  exchanges  will 
be  perfectly  accommodated,  namely,  the  power  to  sell  and  collect  exchange. 
The  committee  have  heretofore  adverted  to  this;  and,  on  this  whole  subject, 
have  consulted  some  of  the  ablest,  most  practical,  and  experienced  men  , 
and  their  own  views  are  fully  confirmed  by  the  information  derived  from 
such  high  sources.  They  cannot  in  any  way  so  well  illustrate  this  branch 
of  it,  and  its  beneficial  effects  on  the  sound  local  banks,  together  with  other 
advantages,  as  by  briefly  imbodying  the  following  views  which  have  thus 
been  communicated  to  them  : 

A  bill  drawn  by  one  agency  on  another,  in  any  remote  part  of  the  United 
■States,  will  be  as  good  as  specie  within  the  commercial  sphere  of  the  empo¬ 
rium  where  the  agency  is  located  at  which  payment  is  to  be  made,  and  may 
generally  be  negotiated  above  par  by  any  holder  within  that  sphere,  and  at 
•a  rate  in  some  measure  proportioned  to  his  distance  from  its  commercial 
centre.  If,  for  instance,  a  merchant  in  Cincinnati  wishes  to  remit  money  to 
a  manufacturer  in  Connecticut,  a  bill  drawn  by  the  agency  in  Cincinnati, 


13  [  133  1 

where  the  deposite  is  made,  on  the  agency  in  New  York,  would  be  worth  a 
half  per  cent,  more  than  specie  to  the  payee. 

Exchanges  through  the  agencies  will  meet  all  the  exigencies  of  the  mar¬ 
kets.  It  not  unfrequently  happens  that  New  Orleans  is  indebted  to  Ohio, 
for  agricultural  products;  Ohio  to  New  York,  for  manufactured  goods,  do¬ 
mestic  or  imported  ;  and  New  York  to  New  Orleans,  for  cotton.  Every  well- 
informed  merchant  in  those  several  sections,  will  be  advised  of  the  state  o£ 
the  markets.  A  New  Orleans  merchant  wishes  to  remit  to  Ohio ;  he  de- 
posites  his  specie  in  the  agency  at  New  Orleans,  and  gets  the  same  office  to 
accept  his  own  bill  of  exchange  for  $1,(300,  payable  to  the  order  of  his  Ohio 
correspondent,  and  transmits  it  accordingly.  This  will  be  above  par  in  the 
Ohio  market,  because  it  is  a  good  remittance  for  New  York,  where  bills  on 
Mew  Orleans  command  a  premium.  It  is  bought  by  an  Ohio  merchant,  who 
remits  it  to  New  York  in  payment  for  goods ;  and  from  New  York  it  is  sent 
to  New  Orleans,  to  pay  for  cotton.  Upon  its  arrival,  it  is  presented  to  the 
agency  where  it  was  accepted,  and  the  specie  is  ready  for  its  redemption. 
The  holder,  however,  not  willing  to  be  burdened  with  the  specie,  will  gene- 
trally  prefer  the  specie- notes  of  the  agency.  Thus  this  $1,000  in  specie,  after 
paying  a  small  premium  at  the  agency,  will  have  paid  more  than  its  amount 
in  two  remote  markets,  sent  a  safe  and  convenient  currency  of  $1,000  into 
the  channels  of  commerce,  and  is  still  at  rest  sustaining  this  amount  of  cir¬ 
culation. 

The  use  of  bills  of  exchange  will  not  be  superseded  by  the  specie-notes 
of  the  Exchequer.  The  former  have  always  been  preferred,  and  were  exten¬ 
sively  used  under  the  two  national  banks  when  their  paper,  in  sound 
credit,  had  every  advantage  which  this  will  possess,  of  being  made  such  a 
substitute.  This  proof  from  experience  is  conclusive.  One  ground  of 
preference,  which  has  always  been  appreciated  here  and  in  Europe,  is,  that 
bills  of  exchange  are  more  safe  than  bank-notes,  as  they  offer  no  temptation 
to  robbery  or  embezzlement ;  and  as  several  may  be  sent  of  the  same 
tenor  and  date  by  different  conveyances  (in  which,  case  no  loss  will  be  sus¬ 
tained  if  any  one  arrives  in  safety),  the  risk  may  easily  be  reduced  almost 
to  an  impossibility.  The  perfect  character  of  these  bills  of  exchange,  from 
their  undoubted  credit,  will  generally  give  them  a  preference  over  others. 
They  will  never  be  protested  for  want  of  funds,  at  any  office  where  they 
are  payable.  No  embarrassment  can  result  from  the  necessity  of  transmit¬ 
ting  specie,  from  office  to  office.  The  occasions  are  very  rare  (and  if  this 
system  were  in  operation  would  be  still  more  rare)  in  which  specie  needs 
to  be  removed  ;  as  for  almost  every  purpose  good  paper  is  preferred.  The 
paper  of  one  office  would  generally  be  as  good  as  specie  in  most  others. 
If  a  deposite  were  made  in  New  York  to  meet  a  draft  on  the  office  in  New 
Orleans,  this  latter  office  would  prefer  the  New  York  paper  to  coin,  in  the 
common  state  of  exchanges.  When  the  system  has  been  some  time  in 
operation,  specie  will  have  found  its  proper  places  of  repose,  and  move¬ 
ments  of  it  would  seldom  be  required.  Should  an  apprehension  be  enter¬ 
tained  that  the  retirement  of  specie  into  the  agencies  would  embarrass  the 
banks,  it  will  be  dissipated  by  a  little  reflection  upon  the  operations  already 
described.  Those  officers  are  bound  to  deliver,  at  the  time  of  deposite,  an 
amount  in  paper  equal  to  the  amount  received  in  specie.  That  paper  will 
take  the  place  of  the  specie  which  it  represents,  and  the  same  portion  of  it 
will  be  deposited  by  merchants  and  others  who  keep  their  accounts  in 
bonking  institutions,  as  of  the  specie  for  which  it  is  a  substitute.  As  it  will 


14 


[  133  ] 

•be  a  light  and  convenient  circulation,  it  will  mingle  more  with  the  paper 
of  banks  of  sound  credit,  in  common  commercial  operations,  and  conse¬ 
quently  be  more  frequently  used  in  making  payments  upon  discounted 
notes  and  other  indebtedness  to  moneyed  institutions  than  specie  now  is. 
When  possessed  by  a  bank,  it  has  all  the  value  of  specie.  If  means  are 
wanted  for  a  deposite  in  an  agency,  this  paper  will  be  received  of  a  bank 
for  that  purpose  as  readily  as  specie.  Should  gold  and  silver  be  wanted  for 
exportation,  or  any  other  extraordinary  demand,  the  bank  which  possesses 
this  paper  has  the  certain  means  of  converting  it,  at  pleasure,  into  the  arti¬ 
cle  required.  Every  bill  of  exchange  payable  at  these  offices,  will,  at  its 
maturity,  restore  to  circulation,  either  in  specie  or  this  sound  paper,  the 
amount  deposited  for  its  procurement.  Indeed,  it  is  difficult  to  foster  a 
doubt,  that,  in  regard  to  the  means  of  redeeming  their  own  emissions,  the 
banks  will  possess  more  ample  resources  than  at  present.  It  is  true  that 
the  channels  of  commerce  will  be  partially  filled  with  a  medium  of  sound 
and  imperishable  credit,  which  will  stand  the  shock  of  every  possible  vi¬ 
cissitude,  except  the  subversion  of  the  Government.  But  this  will  promote 
the  strength  of  the  banking  institutions  no  less  than  the  stability  of  the 
currency. 

From  the  establishment  of  a  national  corporation  with  a  large  specie  capi¬ 
tal,  the  banks  were  apprehensive  of  sustaining  injury  by  the  great  and  sudden 
withdrawment  of  the  precious  metals  from  their  possession.  But  the  agencies 
can  produce  no  such  embarrassment,  for  their  progress  will  be  too  gradual  to 
cause  any  convulsion ;  and  the  immediate  restoration  to  the  market  of  a  me¬ 
dium  of  equal  amount  and  value  with  that  which  is  withdrawn,  will  enable 
those  institutions  at  any  time  to  command  the  specie  which  they  require.  As 
a  just  price  is  to  be  paid  for  exchanges,  it  is  believed  that  all  the  expenses  of 
conducting  the  business  of  the  Exchequer  and  its  agencies  will  be  defrayal 
from  that  source,  and  probably  a  much  larger  sum  may  be  realized.  The 
losses  of  the  currency  by  fire,  shipwreck,  and  other  casualties,  as  shown  in  the 
experience  of  banks,  would  not  be  an  inconsiderable  item  of  gain.  A  small 
premium,  say  a  half  or  quarter  of  one  per  cent.,  might  reasonably  be  exacted 
of  depositors,  if  hereafter  deemed  necessary,  upon  notes  issued  in  exchange 
for  specie.  While  this  system  will  furnish  the  desired  means  for  the  collect¬ 
ing,  safekeeping,  and  disbursement,  of  the  public  revenue,  and  all  the  requis¬ 
ite  facilities  for  exchanges  between  different  sections  of  the  country,  as  well 
as  create  a  sound  and  convenient  currency,  it  is  exempt  from  the  objectiona¬ 
ble  features  of  other  modes  of  effecting,  in  part  or  in  whole,  the  same  objects, 
heretofore  presented  for  consideration.  It  authorizes  no  banks  or  other  cor¬ 
porations,  no  discounts,  no  lending  on  credit  in  any  form  whatever,  no  ex¬ 
pansion  of  the  currency  by  public  drafts  or  otherwise,  no  paper-money  resting 
on  the  credit  of  the  Government  and  depending  on  accruing  revenues  for  re¬ 
demption.  It  confers  no  extent  of  Executive  patronage  or  influence.  No 
officer  can  be  either  appointed  or  removed  by  the  President  without  the  con¬ 
currence  of  the  Senate,  and  only  for  certain  specified  causes.  It  confers  no 
discretionary  powers  by  which  partialities  may  be  indulged  in  behalf  of  a  per¬ 
sonal  or  political  favorite.  Whoever  presents  his  specie-notes  or  bills  of  ex¬ 
change  at  maturity  is  entitled  to  his  specie,  and  whoever  presents  his  specie 
is  entitled  to  the  paper  which  he  selects.  The  rights  of  every  applicant  are 
defined  by  law,  and  his  transactions  at  the  agency  are  of  the  simplest  charac¬ 
ter.  The  laws  of  trade,  and  not  any  superintending  board  or  public  agent, 
decide  the  amount  of  deposites,  bills  of  exchange,  and  paper  currency.  The 


15 


[  133  ] 

wants  and  means  of  individuals  composing-  the  community  will  best  regulate 
the  proportions  of  paper  and  specie,  in  the  absence  of  all  artificial  restraint  and 
supervision  of  the  Government. 

Another  important  consideration  which  the  committee  -would  add  to  these 
views, is,  that  while  the  operations  of  the  Exchequer  would  tend  to  promote 
the  real  interests  of  the  sound  banks,  it  would,  at  the  same  time,  tend  to  drive 
into  liquidation  the  unsound  ones.  Banking  capital,  which  has  so  enor¬ 
mously  increased  within  a  few  years  past,  wonld  be  reduced.  There  would, 
eventually,  only  enough  remain  to  answer  the  commercial  and  other  business 
wants  of  the  country.  The  large  surplus  of  capital  which  sought  investment 
in  banks  for  the  exorbitant  profits  of  those  institutions,  under  an  inflated  and 
unnatural  state  of  the  currency,  would  retire,  and  perform  the  more  legitimate 
office  of  permanent  loans,  on  bond  and  mortgage,  to  the  agricultural  interest 
of  the  community.  One  great  evil  which  the  country  has  experienced,  has 
been  from  the  withdrawal  of  capital  from  the  farming  interest  to  invest  it  in 
banking  operations.  That  interest,  from  the  very  nature  of  their  business, 
ought  not  to  be  driven  to  bank  accommodations;  they  should  be  able  to  com¬ 
mand  permanent,  instead  of  temporary  loans.  Any  system,  therefore,  which 
should  aid  the  retirement  of  the  surplus  banking  capital  would  greatly  benefit 
the  substantial  producing  classes  of  the  country. 

From  what  has  been  said,  it  will  be  seen  that  the  Exchequer  wr  ill  furnish  a 
uniform  currency,  and  effectually  equalize  exchanges,  it  has  no  discounting 
power,  like  that  of  the  late  Bank  of  the  United  States — a  power  which  was 
the  principal  source  of  all  the  difficulties,  and  of  the  subsequent  disasters  of 
that  institution.  In  order  to  make  dividends,  it  was  necessary  to  employ  its 
enormous  capital  in  the  shape  of  discounts.  The  great  portion  of  those  dis¬ 
counts  was  not  based  upon  legitimate  business  paper.  They  were  long  loans, 
stock  loans,  accommodation  loans,  permanent  loans.  And  one  reason  for 
this  was,  that,  wdthin  the  sphere  of  the  operations  of  the  bank,  there  was  not 
enough  of  legitimate  business  paper  to  employ  the  capital.  There  was,  there¬ 
fore,  a  kind  of  necessity  of  employing  it  otherwise;  and  that  apparent  neces¬ 
sity,  in  the  otherwise  disastrous  state  of  the  times,  has  led  to  its  final  over¬ 
throw. 

The  Exchequer  will  possess  all  the  benefits  of  a  Bank  of  the  United  States, 
without  its  attendant  evils.  It  is  powerful  to  do  good,  but  powrerless  to  do 
harm.  The  immediate  effect  of  the  adoption  of  the  measure  will  be  once 
more  to  restore  the  confidence  of  the  country.  That  confidence  is  every¬ 
where  impaired.  It  is  impaired  in  individuals;  it  is  impaired  in  banks;  it  is 
impaired  in  our  State  Governments,  and  even  shaken  in  the  General  Govern¬ 
ment.  The  people  require  some  action  on  the  part  of  Congress  which  shall 
restore  it  That  can  only  be  done  by  the  adoption  of  a  system  like  the  one 
proposed:  a  system  which,  in  its  leading  features,  is  perfectly  unassailable. 
It  will  lay  the  foundation  of  public  confidence  so  broad  and  so  deep  that  it 
cannot  be  shaken.  That  confidence,  once  restored,  will  extend  itself  through¬ 
out  the  country,  and  peace  and  plenty  will  follow  in  its  train. 

But,  if  any  suppose  this  system  will  not  accomplish  ail  that  its  friends 
anticipate,  it  will  certainly  accomplish  much;  and,  inasmuch  as  we  can  do 
nothing  else,  and  we  know  there  is  no  possible  danger  in  it,  why  should  we 
hesitate  to  try  it?  We  shall,  at  all  events,  have  established  one  great  and 
fundamental  principle — a  principle  which  lies  at  the  bottom  of  this  curren¬ 
cy  question,  namely,  that  it  is  the  right  and  duty  of  this  Government,  in  the 
collection,  safekeeping,  and  disbursement,  of  the  public  revenue,  to  aid  ia 


16 


[133] 

furnishing  a  uniform  currency,  and  equalizing  the  exchanges  of  the  coun¬ 
try.  And  if,  in  the  judgment  of  any,  the  measure  does  not  go  far  enough, 
we  shall  have  a  stock  on  which  we  can  engraft  hereafter  such  farther  pro¬ 
visions  as  shall  come  within  the  constitutional  power  of  Congress — within 
the  great  principles  which  have  been  laid  down — and  such  as  shall  be 
deemed  expedient,  and  justified  by  public  sentiment. 

The  system  can  be  tried  without  risk,  and  during  a  period  when  there 
can  be  no  hope  of  adopting  another  favorite  measure.  If,  on  trial,  it  shall 
be  found  to  answer  the  purposes  for  which  it  is  intended,  then  the  necessity 
of  a  national  bank  will  be  superseded,  and  its  friends  will  have  no  reason 
nor  desire  to  urge  it.  If  it  should  not  answer  those  purposes,  then  even  the 
opponents  of  a  national  bank  may  become  satisfied  that  such  an  institution 
is  the  only  remedy  for  the  evils  of  a  deranged  and  disordered  currency. 
But  until  some  such  system  be  adopted,  it  may  well  be  doubted  whether,  in 
the  present  aspect  and  past  experience  of  our  banking  institutions,  the  peo¬ 
ple  can  be  brought  into  the  support  of  a  national  bank. 

Shall  we,  then,  fold  our  arms,  and  deliberately  resolve  to  do  nothing  ? 
Can  the  friends  of  a  national  bank,  as  well  as  the  friends  of  the  Sub-Treas- 
ury,  justify  themselves  to  their  constituents  or  the  country  in  such  a  course  ? 
These  are  questions  for  grave  consideration.  Both  these  systems,  in  one 
shape  and  another,  have  been  discredited :  and  with  no  present  prospect  of 
either  of  them  being  re-established.  What,  then,  remains  to  be  done  ? 
The  people  expect  and  require  action  at  our  hands.  The  committee  pre¬ 
sent  the  Exchequer  plan,  free  from  the  objections  which  were  urged 
against  it  on  its  original  introduction — a  plan  which,  in  their  judgment, 
unites  the  benefits,  without  the  evils,  of  the  others,  and  ask  for  it  that  con¬ 
sideration  which  it  is  so  justly  entitled  to  receive. 

In  proposing  the  bill,  which  the  committee  now  submit  to  the  Senate,  an 
attempt  has  been  made,  as  far  as  possible,  to  consult  the  views  and  avoid 
the  objections  of  all  parties,  as  disclosed  in  the  history  and  discussions  of 
the  several  plans  heretofore  suggested  for  accomplishing  the  same  objects, 
and  it  is  submitted  in  the  hope  that  the  attempt  will  prove  successful. 


A  BILL  amendatory  of  the  several  acts  establishing  the  Treasury  Department. 

Be  it  enacted  by  the  Senate  and  House  of  Representatives  of  the  United 
Skates  of  America  in  Congress  assembled ,  That  there  shall  be,  and  hereby 
is,  created  and  established  in  the  Treasury  Department,  at  the  seat  of  the 
Government  of  the  United  States,  a  board  to  be  called  the  Exchequer  of  the 
United  States,  to  be  composed  of  three  commissioners,  to  be  appointed  by 
the  President,  with  the  advice  and  consent  of  the  Senate,  and  who  shall  be 
removed  from  office  only  with  the  like  concurrence  of  the  Senate,  and  for 
some  one  or  more  of  the  following  causes,  to  wit,  physical  inability,  incom¬ 
petency,  or  neglect,  or  violation  of  duty ;  and  in  every  such  case,  it  shall  be 
the  duty  of  the  President  to  communicate  to  the  Senate  the  particular  rea¬ 
sons  of  the  proposed  removal ;  but  during  the  recess  of  the  Senate,  the  Presi¬ 
dent  may,  for  any  of  the  aforesaid  causes,  suspend  any  of  the  said  commis¬ 
sioners,  and  appoint  a  temporary  substitute,  and  within  the  first  week  of  the 
ensuing  session  of  the  Senate,  he  shall  lay  before  that  body  the  reasons  of 
such  suspension,  and  if  the  Senate  concur  with  him,  the  commissioner  so 


17 


[133] 

suspended  shall  be  removed ;  but  if  it  do  not  concur  with  him,  the  said 
commissioner  shall  be  restored.  And  on  the  first  organization  of  the  board, 
one  of  the  three  commissioners  shall,  the  members  thereof,  be  elected 
president,  who  shall  hold  his  office  for  two  years,  when  a  new  election  shall 
be  made;  and  in  like  manner  a  new  election  shall  take  place  afterward,  at 
the  end  of  each  successive  period  of  two  years.  And  the  Secretary  of  the 
Treasury  shall  have  authority  to  appoint,  on  the  recommendation  of  the 
board,  all  such  inferior  officers  as  in  the  judgment  of  the  board  the  transac¬ 
tions  of  its  business  may  require,  the  amount  of  their  respective  compensa¬ 
tions,  till  fixed  by  law,  to  be  determined  by  the  board,  who  may  take  bonds 
for  the  faithful  discharge  of  their  duty  for  such  sums  and  in  such  manner  as 
the  Secretary  of  the  Treasury  shall  direct ;  and  each  of  said  commissioners 
shall  receive  an  annual  salary  of  dollars. 

Sec.  2.  And  be  it  further  enacted ,  That  the  said  Board  of  Exchequer 
shall  have  power  to  establish  agencies,  or  offices,  in  such  of  the  cities  or  towns 
of  the  United  States  as  it  may  judge  necessary  and  expedient  for  the  public 
service;  and  also  wherever  Congress  may  bylaw  require  the  same  to  be 
established,  limiting  the  number  to  as  few  as  the  exigencies  of  the  service 
will  admit,  and  in  no  case  exceeding  two  in  any  State  or  Territory;  and 
such  officers  and  agents  as  may,  by  the  Board  of  Exchequer,  be  thought  ne¬ 
cessary  for  the  management  of  such  agencies,  and  the  transaction  of  their 
business,  shall  be  appointed  by  the  Secretary  of  the  Treasury,  on  the  recom¬ 
mendation  of  the  Board  of  Exchequer;  and  the  said  Board  shall  have  power 
to  fix  the  amount  of  the  respective  compensations  of  such  officers  till  the  same 
shall  be  determined  by  law,  and  to  provide  regulations  for  the  government  of 
such  agencies,  the  transaction  of  their  business,  and  the  rendering  accounts 
of  all  their  proceedings.  And  in  such  regulations  they  shall  so  assign  and 
arrange  the  duties  of  the  officers  of  the  said  agencies,  as  that  one  of  those 
officers  shall  be  a  check  and  control  upon  the  other;  and,  for  that  purpose, 
they  shall  require  that  the  accounts  and  proceedings  of  each  shall  be  entered 
in  proper  books.  And  any  of  the  officers  of  the  said  agencies  may  be  removed 
by  the  Secretary  of  the  Treasury  on  the  recommendation  of  said  board,  for 
physical  inability,  or  incompetency,  or  neglect,  or  violation  of  duty;  but  it 
shall  be  his  duty  to  state  every  removal  of  any  principal  officer  of  any  agen¬ 
cy,  with  his  reasons  therefor,  in  his  general  annual  report  of  the  transactions 
of  the  Exchequer. 

Sec.  3.  And  be  it  further  enacted ,  That  the  said  Exchequer  and  its  offi¬ 
cers  shall  be  the  general  agents  of  the  Government  of  the  United  States,  for 
receiving,  safekeeping,  and  disbursing  the  public  moneys,  and  transferring 
and  transmitting  the  same,  under  the  direction  of  the  Secretary  of  the  Treas¬ 
ury;  and  all  public  moneys  received,  from  whatever  sources,  shall,  under 
the  same  directions,  be  paid  into  the  said  Exchequer,  or  its  agencies;  and 
the  principal  officers  employed  in  such  agencies,  shall  give  bonds  to  the 
United  States  for  such  amounts,  and  in  such  form,  as  the  Secretary  of  the 
Treasury  shall  prescribe,  for  the  faithful  performance  of  their  duties.  And 
the  said  Board  of  Exchequer,  and  its  several  agencies,  shall  pay  all  warrants, 
drafts,  or  orders,  made  thereon  by  the  Treasurer  of  the  United  States,  and  by 
all  disbursing  officers  and  agents  of  the  Government  having  authority  to 
make  such  drafts  or  orders.  And  every  such  payment  shall  be  made,  at  the 
option  of  the  person  entitled  to  receive  it,  in  gold  and  silver  coin,  or  in  specie- 
notes,  to  be  issued  in  such  form  as  is  hereinafter  prescribed.  But  such  notes 
shall  never  exceed  the  actual  amount  of  specie  holden  for  their  redemption, 


18 


[133] 

Sec.  4.  And  be  it  further  enacted ,  That  the  said  Exchequer  and  its  offi¬ 
cers  shall  perform  the  duties  of  commissioners  of  loans,  in  receiving  subscrip¬ 
tions,  transferring  stock,  and  paying  dividends  and  interest  thereon,  under  the 
directions  of  the  Secretary  of  the  Treasury,  and  shall  render  to  the  Treasurer 
of  the  United  States  all  necessary  facilities  for  transferring  and  disbursing  the 
public  funds  as  shall  be  required  by  him,  and  shall  perform  all  the  duties  of 
pension  agents  under  the  regulations  prescribed  by  the  Secretary  of  War,  and 
shall  render  and  perform  all  other  duties  and  services  in  relation  to  the  col¬ 
lecting,  keeping,  and  disbursing  of  the  public  funds,  as  shall  be  prescribed  by 
law  or  by  the  Secretary  of  the  Treasury. 

Sec.  5.  And  be  it  further  enacted ,  That  it  shall  be  lawful  for  the  Exche¬ 
quer,  at  the  seat  of  Government,  and  its  several  agencies,  to  receive  on  pri¬ 
vate  deposite  gold  or  silver  coin  or  bullion,  the  property  of  individuals,  to  be 
held  as  in  other  cases  of  deposites  made  by  individuals  for  convenience  and 
security;  and  to  issue  specie-notes  for  the  same  in  such  form  as  the  said  board 
shall  prescribe;  which  notes  shall  always  be  redeemed  on  presentation  at  the 
agency  where  issued ;  but  the  amount  so  deposited  shall  never  exceed  in  the 
whole  fifteen  millions  of  dollars,  to  be  distributed  by  the  board  among  its 
several  agencies  according  to  the  extent  of  their  business,  respectively;  and 
for  issuing  such  specie-notes,  no  higher  premium  shall  be  demanded  than 
shall  be  sufficient  to  indemnify  against  the  hazard  of  loss,  and  remunerate  for 
the  safekeeping  the  deposite,  and  in  no  instance  to  exceed  the  one  half  of 
one  per  cent.  But  specie-notes  issued  by  the  board,  and  its  several  agencies, 
shall  be  redeemable  only  at  the  place  where  issued,  unless  the  board  shall  see 
cause  to  order  otherwise. 

Sec.  6.  And  be  it  further  enacted ,  That  the  Secretary  of  the  Treasury  is 
hereby  authorized  and  directed  to  cause  to  be  prepared  specie- notes  of  de¬ 
nominations  not  less  than  five  dollars,  nor  exceeding  one  hundred  dollars, 
which  notes  shall  be  signed  by  the  Treasurer  of  the  United  States,  and  coun¬ 
tersigned  by  the  president  of  the  Board  of  Exchequer,  and  made  payable  to 
the  order  of  the  principal  agent  at  each  agency,  and  shall  be  by  him  endorsed 
when  issued  at  such  agency,  and  which  notes  shall  be  redeemable,  and  shall 
be  redeemed,  in  gold  and  silver,  on  demand,  at  the  agency  where  issued. 
And  specie-notes  intended  to  be  issued  hy  the  Board  of  Exchequer,  at  the 
seat  of  Government,  shall  be  in  like  form,  and  shall  be  payable  to  the  order 
of  the  commissioners,  and  shall  be  endorsed  by  some  one  of  them  when  is¬ 
sued,  and  shall  be  redeemable  and  redeemed  at  said  board,  on  demand,  in 
gold  and  silver;  and  exact  and  perfect  lists  of  all  notes  so  signed  shall  be  kept 
at  the  Treasury ;  and  all  specie-notes  issued  under  the  authority  of  this  act 
may,  when  redeemed,  be  reissued  by  the  board  and  its  agencies  respectively. 

Sec.  7.  And  be  it  further  enacted ,  That  it  shall  be  lawful  for  the  Ex¬ 
chequer,  at  the  seat  of  Government,  and  its  several  agencies,  on  the  deposite 
of  gold  or  silver  coin,  or  bullion,  as  a  payment  therefor  to  draw  bills  of  ex¬ 
change  made  payable  at  said  Exchequer,  or  any  agency,  where  funds  are 
provided  on  which  to  draw,  and  also  to  accept  bills  of  exchange ;  the  amount 
of  which  bills  and  acceptances  shall,  in  no  case,  exceed  the  sum  so  deposited. 
And  such  bills  of  exchange  and  acceptances  shall  be  signed  and  counter¬ 
signed  in  such  manner  as  the  said  board  shall  prescribe. 

Sec.  8.  And  be  it  further  enacted ,  That,  on  each  bill  of  exchange  or  ac¬ 
ceptance,  the  Exchequer  or  agency  at  which  such  bill  or  acceptance  is  made, 
shall  be  entitled  to  receive  a  just  and  reasonable  premium  not  exceeding  the 


19  [  133  ] 

fair  cost  of  remitting  specie  to  the  place  of  payment,  and  in  no  case  to  ex¬ 
ceed  two  per  centum  on  the  amount  of  such  bill  or  acceptance. 

Sec.  9.  And  be  it  further  enacted ,  That  it  shall  be  lawful  for  the  said 
Board  of  Exchequer  and  each  of  its  agencies,  under  regulations  to  be  pre¬ 
scribed  by  the  board,  to  receive  and  take  charge  of,  for  collection,  such  drafts 
or  bills  of  exchange  as  may  be  deposited  with  them  for  that  purpose,  drawn 
on  any  place  where  an  office  of  the  Exchequer  may  be  established ;  but,  in 
no  case  shall  any  advance  or  payment  be  made  on  account  of  such  draft  or 
bill  until  it  shall  have  been  actually  collected  and  advice  received  of  such 
collection,  whereupon  the  proceeds  shall  be  paid  over  to  the  person  entitled 
to  receive  them  at  the  office  where  the  said  draft  or  bill  was  originally  depos¬ 
ited  for  transmission  and  collection,  deducting  therefrom  such  reasonable 
charges  and  commission  as  may  have  been  agreed  upon,  which  shall  in  no 
case  exceed  per  centum  on  the  amount  collected. 

Sec.  10.  And  be  it  further  enacted ,  That  it  shall  be  the  duty  of  the  said 
Board  of  Exchequer,  within  three  months  after  its  first  organization,  to  estab¬ 
lish  such  by-laws  and  rules  of  proceeding  as  it  may  judge  expedient  and 
proper  for  the  regulation  of  its  concerns  and  the  government  of  its  agencies; 
and  copies  of  all  existing  by-laws  and  regulations  shall  be  laid  before  Con¬ 
gress  every  year  at  its  annual  session. 

Sec.  11.  And  be  it  further  enacted ,  That  the  Secretary  of  the  Treasury 
is  authorized,  from  time  to  time,  on  the  application  of  the  Board  of  Exche¬ 
quer,  to  furnish  for  its  own  use,  and  that  of  its  several  agencies,  a  suitable 
amount  of  specie-notes,  to  be  used  in  the  transaction  of  its  business  ;  but, 
the  amount  of  such  notes  issued,  either  in  payment  to  the  public  creditor, 
or  on  the  deposites  of  individuals,  shall  never  exceed  the  actual  amount  of 
specie  on  hand  for  their  redemption.  And  all  dues  to  the  United  States,  or 
any  officer  or  department  thereof  authorized  to  receive  public  dues,  maybe 
paid  in  gold  or  silver  coin,  in  specie-notes  issued  under  this  act,  or  in  the 
notes  of  banks  which  shall  be  immediately  convertible  into  specie  at  the 
place  where  received. 

Sec.  12.  And  be  it  further  enacted ,  That  the  Board  of  Exchequer  at  the 
seat  of  Government,  and  each  of  its  agencies,  shall  settle  weekly,  or  oftener, 
with  all  banks  in  their  neighborhood  whose  paper  they  may  have  received, 
and  pay  or  collect,  as  the  case  may  be,  all  balances  between  it  and  said 
banks  ;  and  no  individual  shall  be  allowed,  at  any  time,  to  stand  as  debtor 
to  the  Exchequer,  or  any  of  its  agencies,  in  account.  And  it  shall  be  the 
duty  of  the  said  board  of  Exchequer,  and  each  of  its  several  agencies,  at  all 
times,  so  to  limit  its  issues  that  its  gold  and  silver  on  hand  shall  be  equal, 
dollar  for  dollar,  to  the  amount  of  such  issues  outstanding. 

Sec.  13.  And  be  it  further  enacted ,  That  the  Board  of  Exchequer,  and 
its  several  agencies,  shall  keep  separate  and  distinct  sets  of  books,  for  the 
purpose  of  entering  and  recording  in  one  set,  all  transactions  respecting 
the  collection,  keeping,  and  disbursing  of  the  publie  revenue,  and  transmit¬ 
ting  the  public  moneys  from  place  to  place,  for  the  service  of  Government ; 
and  in  another,  all  transactions  and  accounts  arising  from  the  operations  in 
exchange  hereinbefore  authorized,  and  other  transactions  not  on  Govern¬ 
ment  account ;  and  all  profits  accruing  from  such  operations  in  exchange 
on  individual  account,  and  from  private  deposites  shall  be  applied,  in  the 
first  place,  to  pay  all  salaries  and  compensations,  and  to  defray  all  expenses, 
incurred  under  the  authority  of  this  act,  and  the  residue  thereof  shall  be 
placed  semi-annually  to  the  credit  of  the  Treasurer  of  the  United  States. 


20 


[138] 

Sec.  14.  And  be  it  further  enacted ,  That  the  necessary  rooms  and  vaults1 
for  the  safekeeping  of  the  public  moneys,  and  for  the  transaction  of  the  bu¬ 
siness  of  the  Board  of  Exchequer,  and  its  agencies,  shall  be  provided  by  the 
Treasury  Department  at  the  city  of  Washington,  and  in  the  custom-houses,, 
mints,  branch  mints,  and  other  public  buildings  belonging  to  the  United 
States,  so  far  as  the  same  can  be  furnished  without  detriment  to  the  public 
service;  and  where  the  same  cannot  be  so  furnished,  the  said  board  may 
provide  others. 

Sec.  15.  And  he  it  further  enacted ,  That  it  shall  be  lawful  for  the  said 
Board  of  Exchequer  to  appoint,  as  agent  for  the  board,  any  specie-paying 
bank  in  any  State,  in  cases  where  it.  may  not  be  deemed  expedient  to  es¬ 
tablish  an  office  or  agency  of  the  said  board  as  hereinbefore  provided,  but 
such  bank  shall  not  be  authorized,  in  any  event,  to  receive  deposites,  or  to 
accept  or  sell  bills  or  drafts  on  account  of  the  Board  of  Exchequer. 

Sec.  16.  And  be  it  further  enacted ,  That  full  and  exact  accounts  of  the 
proceedings  of  the  board  and  its  several  agencies,  shall  be  furnished  to  the 
Secretary  of  the  Treasury  as  often  as  he  may  prescribe?  and  it  shall  be  the 
duty  of  the  said  Secretary  to  lay  abstracts  of  the  same  before  Congress  at 
the  commencement  of  each  annual  session,  and  to  furnish  full  and  particular 
accounts  and  statements  of  the  transactions  of  the  board,  and  its  agencies, 
when  required ;  and  the  amount  of  specie-notes  outstanding  at  the  end  of 
every  quarter  shall,  so  soon  thereafter  as  the  same  may  be  ascertained,  be 
published  by  the  Secretary  of  the  Treasury. 

Sec.  17.  And  be  it  further  enacted ,  That  if  any  member  of  the  Ex¬ 
chequer  Board,  or  any  officer  or  clerk  employed  in  its  business,  or  any  of  its 
agencies,  shall  convert  to  his  own  use  in  any  way,  any  money  or  security 
deposited  with  or  belonging  to  the  said  board  or  any  of  its  agencies,  or  be¬ 
longing  to  the  United  States,  or  any  other  person  or  persons  dealing  or  de¬ 
positing  with  the  said  board  or  any  agency,  he  shall  be  deemed  guilty  of 
felony,  and  on  conviction  thereof  before  any  court  of  the  United  States,  of 
competent  jurisdiction,  shall  be  sentenced  to  imprisonment  fora  term  not  less 
than  nor  more  than  years,  and  to  a  fine  equal  to  twice  the  sum 

or  value  of  the  property  embezzled. 

Sec.  18.  And  be  it  further  enacted.  That,  if  any  officer  or  member  of  the 
Board  of  Exchequer,  or  any  of  its  agencies  established  under  the  provisions 
of  this  act,  shall  issue  any  specie-note,  or  make,  accept,  or  deliver  any  draft 
or  bill  of  exchange,  without  having  received  the  full  value  thereof  in  specie, 
and  caused  the  receipt  of  the  same  to  be  duly  entered  in  the  books  of  the  said 
agency,  or  shall  be  guilty  of  any  other  mal-practice,  by  which  any  responsi¬ 
bility  of  the  said  agency,  or  of  the  Board  of  Exchequer,  or  of  the  United 
States,  shall  be  improperly  created  or  increased,  he  shall  be  deemed  guilty  of 
a  felony,  and,  on  conviction  thereof  in  any  court  of  the  United  States  of  com¬ 
petent  jurisdiction,  shall  be  sentenced  to  imprisonment  for  a  term  not  less  than 
one  year  nor  more  than  seven  years,  and  to  a  fine  equal  to  the  amount  of  the 
specie-note  so  issued,  or  of  the  bill  or  draft  so  made,  accepted,  or  delivered,  or 
to  the  amount  of  the  responsibility  so  created  or  increased. 

Sec.  19.  And  be  it  further  enacted ,  That  the  Secretary  of  the  Treasury 
shall  have  power,  at  his  discretion,  by  himself  or  by  an  agent  duly  appointed 
by  him,  to  examine  the  officers  and  clerks  of  the  Exchequer  and  its  agencies 
on  oath  or  affirmation,  touching  all  matters  relating  to  the  Exchequer  or  it 
agencies,  or  either  of  them;  which  said  oath  the  said  Secretary,  or  said  agent8 


21 


[  133  J 

is  hereby  authorized  to  administer.  And  if  any  person  so  examined  shall 
wilfully  make  any  false  statement,  or  wilfully  refuse  to  disclose  or  declare  the 
whole  truth,  such  person  shall  be  deemed  guilty  of  wilful  and  corrupt  per¬ 
jury,  and  shall  suffer  the  pains  and  penalties  thereof,  on  conviction  before  any 
court  competent  to  try  the  same.  And  the  said  Exchequer  and  agencies  shall, 
at  all  times,  be  open  to  examination  by  any  committee  appointed  by  Con¬ 
gress,  or  either  House  thereof. 

Sec.  20.  And  be  it  further  enacted ,  That  all  acts  and  parts  of  acts  incon¬ 
sistent  with  the  provisions  of  this  act,  be,  and  the  same  are  hereby,  repealed. 


V 


